HSBC temporarily withdraws mortgage deals amid turbulent times in UK lending market
Cornerstone discusses the news that HSBC temporarily withdraws mortgage deals amid turbulent times in UK lending market.
HSBC has temporarily withdrawn mortgage deals for new borrowers, reflecting the challenges faced by the UK lending market. This move highlights the increasing pressures on lenders to raise mortgage rates.
Effective immediately, HSBC will be removing all its “new business” residential and buy-to-let products, with the deals expected to be available again on Monday. Consequently, it is likely that mortgage rates will rise when the deals become accessible again.
This decision by HSBC follows a similar announcement made by rival lender Nationwide, who cited the need to raise fixed rates for new borrowing to maintain sustainability.
This comes after nearly 10% of mortgages have been taken off the market due to concerns about increasing interest rates, according to data from Moneyfacts. The figures indicate that approximately 800 residential and buy-to-let deals have been withdrawn, and average rates on two- and five-year fixed deals have also risen.
Adding to this, the Nationwide building society announced that mortgage rates on new fixed deals would increase by up to 0.45 percentage points in response to higher-than-expected inflation figures.
The UK lending market continues to experience turbulent times, influenced by data revealing a slower-than-expected decline in inflation.
This situation has led to predictions of a potential interest rate hike by the Bank of England, with estimates suggesting a rise from the current rate of 4.5% to as high as 5.5%.
According to financial data firm Moneyfacts, the average two-year-fixed-rate mortgage has increased from 5.49% to 5.82% since the beginning of June. Similarly, the average five-year deal has risen from 5.17% to 5.49% during the same period.
David Hannah, Chairman at Cornerstone Group International, discusses the current state of the property market:
“The rise in mortgage rates and mortgages being pulled by lenders due to inflation figures being stronger than expected is unwelcome news for homeowners, especially first-time buyers.
“This is being done in anticipation of an expected rise in interest rates which will cause borrowers more issues when looking to purchase a property.
“We are already seeing record levels of unaffordability in the UK property market and lenders such as HSBC withdrawing mortgage deals is only going to further exacerbate the situation for potential buyers in the property market.”
Kindly shared by Cornerstone
Main article photo courtesy of Pixabay
